State borrows from commercial banks

Most people reading this story believe that these commercial banks will take money out of their safe and lend it to the Serbian government. That is what the bankers want you to believe, but it is simply not true.

The truth is that these commercial banks do not have 250 million Euros; but they have something more valuable: they have been given the power to “create” money out of thin air by the European Central Bank. Under the old (pre crisis) rules, commercial banks would need to hold only 25 million Euros in reserves before they would be permitted to lend 250 million Euros. Today the reserve requirement is virtually zero, so these commercial banks can simply open a Euro account for the Serbian government and with a few taps on the keyboard they can “create” this money. This 250 million Euros has cost the bankers nothing to create and yet the Serbian people have to pay 20-30 million Euros in annual interest for the money.

I believe Komercijalna Banka is still state-owned. If that is the case then it should open a subsidiary bank in Germany and then lend 250 million Euros to the Serbian government at zero interest. Where would Komercijalna Banka get the money? Out of thin air just like all other banks do. This will sound bizarre to most readers, and it is bizarre, but it is true nevertheless.

Serbia could play the same trick as the western banks and create money for free. Unfortunately the Serbian government is in the pockets of the international banker and they don’t want to change anything. Why should they? It’s a nice little earner.

Out of thin air just like all other banks do. This will sound bizarre to most readers, and it is bizarre, but it is true nevertheless. (Michael Thomas, 9 November 2010 16:45) That will bring the world economy down and overwhelming majority of individual countrys for sure worse then the great depression. Like I have said toilet paper will be more of a value and useful then paper money with nothing to back it up so stock up on toilet paper. It is overwhelming how many country are in debt and just keep borrowing funny money and getting deeper in debt their is a day of reckoning fast aproaching. That keep coming of the press at full speed 24-7 with nothing of value to back them up jut the vast emptiness of nothingness what a fake world and countrys economy. But to say live in your means has become a dirty word for the world, bankers and governments greed and unbounded stupidity.

Most people reading this story believe that these commercial banks will take money out of their safe and lend it to the Serbian government. That is what the bankers want you to believe, but it is simply not true.

The truth is that these commercial banks do not have 250 million Euros; but they have something more valuable: they have been given the power to “create” money out of thin air by the European Central Bank. Under the old (pre crisis) rules, commercial banks would need to hold only 25 million Euros in reserves before they would be permitted to lend 250 million Euros. Today the reserve requirement is virtually zero, so these commercial banks can simply open a Euro account for the Serbian government and with a few taps on the keyboard they can “create” this money. This 250 million Euros has cost the bankers nothing to create and yet the Serbian people have to pay 20-30 million Euros in annual interest for the money.

I believe Komercijalna Banka is still state-owned. If that is the case then it should open a subsidiary bank in Germany and then lend 250 million Euros to the Serbian government at zero interest. Where would Komercijalna Banka get the money? Out of thin air just like all other banks do. This will sound bizarre to most readers, and it is bizarre, but it is true nevertheless.

Serbia could play the same trick as the western banks and create money for free. Unfortunately the Serbian government is in the pockets of the international banker and they don’t want to change anything. Why should they? It’s a nice little earner.

Out of thin air just like all other banks do. This will sound bizarre to most readers, and it is bizarre, but it is true nevertheless. (Michael Thomas, 9 November 2010 16:45) That will bring the world economy down and overwhelming majority of individual countrys for sure worse then the great depression. Like I have said toilet paper will be more of a value and useful then paper money with nothing to back it up so stock up on toilet paper. It is overwhelming how many country are in debt and just keep borrowing funny money and getting deeper in debt their is a day of reckoning fast aproaching. That keep coming of the press at full speed 24-7 with nothing of value to back them up jut the vast emptiness of nothingness what a fake world and countrys economy. But to say live in your means has become a dirty word for the world, bankers and governments greed and unbounded stupidity.